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Revenue Reasonableness Review

Effective: 09/01/10 Approved By: Sr. Associate Vice President for Financial Affairs and Deputy CFO
Revised: 05/26/17

Purpose/Scope

To describe the process for performing reasonableness reviews for the following revenues as a monitoring activity to enhance and document fiscal accountability.

Authority

UTS142.01

University Guidelines

Table of Contents
  1. Overview
  2. Review Process
  3. Reviews Performed by the Budget Office
    1. Statutory Tuition
    2. Designated Tuition
    3. Lab Fees and Supplemental Fees
    4. Mandatory Fees
  4. Reviews Performed by the Associate Director of Financial Assessment and Reporting
    1. Course Fees
    2. Revenue Not Based on Semester Credit Hours or Headcount

A. Overview

Tuition and fee revenue is generally assessed through the Banner student information system (Banner) and uploaded to the financial accounting system (UTShare/PeopleSoft).

To test the accuracy of amounts posted to UTShare/PeopleSoft for revenue based on headcount or semester credit hours, the UTShare/PeopleSoft revenue is compared to the expected revenue calculated using data independent of UTShare/PeopleSoft (e.g., headcount, semester credit hours).

For revenue not assessed through Banner based on headcount or semester credit hours, current year-to-date revenue is compared to year-to-date revenue as of the same month of the prior year.

Reviews are performed on a per-semester basis. Any variances should be within acceptable tolerance ranges or have a reasonable explanation.

B. Review Process

  • For tuition and fees based on headcount or semester credit hours, the expected revenue amount is calculated independently of UTShare/PeopleSoft based on Banner information.
  • For revenue not assessed through Banner based on headcount or semester credit hours, the expected revenue is the year-to-date revenue as of the same month of the prior year (this may also be used as an additional test for course fees based on headcount or credit hours).
  • The expected amount is compared to the amount posted in UTShare/PeopleSoft.
  • The amount posted should be within a reasonable percentage and amount difference from the expected (or prior year) amount.
  • Variances are analyzed to determine cause and materiality level.
  • This information is reported to the Associate Vice President for Financial Affairs and Controller.

C. Reviews Performed by the Budget Office

1. Statutory Tuition

Statutory tuition rates are set by the Texas Education Code with different rates per semester credit hour based on a student's residency and the course level:

  • Undergraduate – Resident
  • Graduate/Doctoral – Resident
  • Undergraduate – Non-Resident
  • Graduate/Doctoral – Non-Resident

The number of semester credit hours taken by each student category is obtained from Banner reports based on the number of paying students (net of exemptions and waivers). The number of semester credit hours is multiplied by the statutory rates to calculate the expected revenue.

This is compared to the revenue posted in UTShare/PeopleSoft, and any variances are analyzed and reported as described in Section B.

2. Designated Tuition

Designated tuition rates are set by the University of Texas (UT) System Board of Regents (BOR) and assessed on the basis of semester credit hours. Semester credit hour data is obtained from Banner reports based on the number of paying students. The number of semester credit hours is multiplied by the tuition rate to calculate the expected revenue. This is compared to the revenue posted in UTShare/PeopleSoft, and any variances are analyzed and reported as described in Section B.

3. Lab Fees and Supplemental Fees

Lab fees and supplemental fees are established in accordance with the Texas Education Code and UT System Board of Regents' Rules and Regulations. Detailed data per course and amount is extracted from Banner. The revenue amount based on the Banner information is compared to the revenue posted in UTShare/PeopleSoft in the following Cost Centers:

  • Lab Fees (LABFEE)
  • Audit Fees (AUDIT)
    NOTE: Banner Student data does not include audit fees collected from non-students.
  • Music Fees (MUSIC)

Any variances are analyzed and reported as described in Section B.

4. Mandatory Fees

Mandatory fee rates are set by the BOR in accordance with Chapter 54 of the Texas Education Code. The assessment basis varies. Rates are charged by semester as a flat fee or per semester credit hour, and some fees have minimum and maximum amounts. The number of semester credit hours taken by each student is obtained from Banner reports based on the number of paying students. This data is multiplied by the fee rates to calculate the expected revenue for each fee. This is compared to the revenue posted in UTShare/PeopleSoft, and any variances are analyzed and reported as described in Section B.

D. Reviews Performed by the Associate Director of Financial Assessment and Reporting

1. Course Fees

Course fees are set in accordance with the Texas Education Code and BOR policies. The assessment basis varies. Banner reports are used to obtain the number of students in a particular course along with the fees assessed. This data is used to calculate the expected revenue for a particular course. The revenue posted to UTShare/PeopleSoft is compared to the expected amount, and current year-to-date revenue is also compared to year-to-date revenue as of the same month of the prior year. Some variances may occur due to the timing of Banner and UTShare/PeopleSoft reports. All variances are analyzed and reported as described in Section B.

2. Revenue Not Based on Semester Credit Hours or Headcount

For revenue not assessed through Banner on the basis of semester credit hours or headcount, current year-to-date revenue is compared to year-to-date revenue as of the same month of the prior year, and any variances are analyzed and reported as described in Section B. The Department Manager may be asked to explain material variances.

Related Forms

None at this time.

Revision History

Date Description
05/26/17 Non-substantive edits and updates throughout.